Loans

Hearing on CARD Act’s Impact on Stay-at-Home Parents

The rules for credit card lending passed in the last few years have largely had positive impacts on consumers, but some issues have still arisen, and now some federal lawmakers want to see them addressed.

Many have pointed out in the past that an unintended consequence of the Credit Card Accountability, Responsibility and Disclosure Act of 2009 is that consumers who do not have an income of their own cannot get a credit card in their name, according to a report from the Charleston Daily Mail. While this was intended to protect those who cannot afford to make credit card payments from obtaining an account, it has also locked many stay-at-home parents out of the credit system, which can be problematic for many reasons.

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And in the past few months, awareness of these problems has increased, leading some lawmakers at the federal level to call for a changing of the rules related to this type of lending, the report said. Stay at home parents who do not have access to lines of credit in their own names, independent of their spouses, may face some difficulties in the event of divorce, death and other unexpected events.

“As a former stay-at-home mom, I think it is important for folks who are staying home to raise a family to have opportunities for credit,” U.S. Rep. Shelley Moore Capito, a West Virginia Republican, told the newspaper. “I think this rule is an unintended consequence of what was mostly aimed at students, where they were getting solicited for cards, running up debt, and nobody was looking at, ‘Are they really going to be able to pay this?'”

Later this week, the House Subcommittee on Financial Institutions and Consumer Credit, which is chaired by Capito, will have a hearing on the rule, and will call in a number of experts to testify on the effects it has for both businesses and consumers alike, the report said. Further, Richard Cordray, the director of the federal Consumer Financial Protection Bureau, has said in the past that he will review the rule at some point in the near future.

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Note: It's important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.

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